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Typically employers will allow you to take out a 401k loan or other retirement plan loans. By accessing your retirement funds, you can accelerate debt repayment – becoming debt free sooner.
This method is a method of last resort. It should only be used with great caution.
The interest you pay is not tax deductible - like it is with a home equity loan. But the interest you do pay is paid to your own 401k plan and not a bank.
The government also stipulates a time limit you can have the funds. If you have not paid back the balance to your retirement plan within 5 years, they charge penalties and will tax you on the outstanding balance.
Your retirement savings are your future. Even though you may be facing a financially difficult time now, you should not consider sacrificing your future income unless it is absolutely necessary. But if you've thought it through, you definitely can use a 401k loan to consolidate debt.